Business Personal Finance

Sunday 20 August 2017

Number of homes repossessed was highest on record in final quarter of 2016

(Stock photo)
(Stock photo)

Charlie Weston Personal Finance Editor

Bank have stepped up repossessions of residential mortgages.

And the number of people getting into early-stage arrears on their mortgages has risen for the first time in four years.

The number of homes taken into possession was the highest on record in final quarter of last year, the Central Bank said.

The latest arrears figures show that 23,224 mortgage accounts were in arrears for less than three months at the end of last year.

This was up slightly on the previous quarter in 2016.

It was the first time since September there was been a rise in the numbers getting into early-stage arrears.

The Central Bank said: “Accounts in arrears of up to 90 days increased slightly in the fourth quarter of 2016, marking the first increase in this category since end-September 2012.”

It comes despite pressure on banks from the European Central Bank to tackle mortgage defaults.

The revelation is sure to cause despair among policymakers after persistent efforts to get arrears levels down.

The Government recently radically restructured the personal insolvency regime to encourage more heavily-indebted consumers to use it.

Data produced by the regulators for the last three months of last year also show that banks repossessed 455 residential properties. This was the highest level recorded since the Central Bank started collecting data on arrears and repossessions.

Overall, a total of almost 77,500 residential mortgage accounts were in some form of arrears. It was the 14th month in a row of this number declining, but still represents 11pc of all residential mortgages.

Close to 33,500 mortgage accounts are more than two years in arrears, prompting fears many of these people will lose their homes.

Investment funds are expected to bulk buy many of these mortgages off the mainstream banks and offer to rent the properties back to those who took out the mortgages under a State-backed scheme.

The figures also show that more than half of the residential mortgages held by unregulated, or vulture, funds are three months or more in arrears. Some four out of 10 are more than two years in arrears.

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